October 30, 2008
Fund-Raising Angst Backed Up by 2008 Declines in Gifts, Survey Finds
By Debra E. Blum
More than one-third of American charities say they have collected fewer dollars so far this year than in 2007, nearly double the share that saw such declines last year, according to a new survey.
What’s more, almost half of the charities that say they rely heavily on end-of-year gifts expect donations to be down for the rest of the year, the survey found.
GuideStar, a Williamsburg, Va., nonprofit organization that makes data about charities available to the public, surveyed more than 2,700 nonprofit groups about their fund raising during the first nine months of 2008.
Thirty-five percent of the respondents reported that giving was down so far this year as compared with last — the highest proportion of charities showing declines since 2003. Only 19 percent of the participants in Guidestar’s survey last year reported that giving was down in the first three quarters of 2007.
Thirty-eight percent of this year’s survey participants reported that contributions had increased so far this year, as compared with 52 percent who reported increases in last year’s study.
In both years, one-quarter of the survey participants reported that contributions had remained about the same.
“Reports that the economy is having an adverse effect on charities are not premature,” says Suzanne E. Coffman, a GuideStar spokeswoman. “It was a commonsense feeling that things were bad, and now we are seeing the numbers.”
Regional Differences
The survey shows that fund-raising results this year have varied somewhat from region to region.
Fewer nonprofit organizations in New England and in the Southwest reported contribution declines — 30 percent and 31 percent, respectively — than groups in other parts of the country.
Charities in the Southeast and the Great Lakes region were most likely to have seen contributions decline this year — each region with 39 percent of area groups reporting drops.
Different kinds of nonprofit organizations have fared differently this year, too.
Disease-related groups, organizations that work in the mental-health field, and religious groups were the most likely to report fund-raising declines — 41 percent each — while public-safety groups and research organizations were among those with the smallest share — 29 percent each — reporting declines.
Among all organizations, the most common reason for fund-raising drops, cited by 63 percent of the participants, was that they had attracted gifts from fewer donors this year as compared with 2007. Among the other reasons, 60 percent said they were receiving smaller gifts from individuals that they had in the past. (Survey participants were allowed to choose more than one reason.)
The next most frequently cited reason — smaller corporate gifts — was cited by only 34 percent of the survey respondents.
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This data is a good foundation for making a case that organizations need to continue to grow their donor base and cultivate existing donors. During times of economic stress, donors with a strong sense of relationship and urgency about the cause will choose that organization over a more casual relationship. In addition, if the organization has communicated their service delivery impact and the need for their services, throughout the year, then the organization will be better positioned to receive support from donors when asking. Boards and staff need to recognize that the cultivation of the donor relationship and demonstration of the impact are as important as the ask. If there is not a strategy for engaging new donors each year, then the risk of decreased support is built into the organizations fund raising effort. Recognizing the need to continue to build good will and friendships by identifying new potential funders must also be the part of the annual strategy. Planning now for next year’s strategy can turn the page on downturns for organizations. Set a goal to inform donors of impact at least four times a year – without asking and to cultivate at least 10% in new donors through various strategies in 2009.
— Jeannette Archer-Simons, CFRE, Consultant Nov 3, 05:24 PM #